Revenue Expenditure Outturn
Item: 6
Asset Management Sub-committee: 1 September 2026
Report by Head of Finance
IMAGE: The Orkney Islands Council crest and the words “ORKNEY ISLANDS COUNCIL” identify the issuing authority for this report.
1. Overview
1.1. This report presents the revenue financial outturn position as at 31 March 2026 in respect of service areas for which the Asset Management Sub-committee is responsible, for scrutiny.
1.2. On 4 March 2025 the Council set its overall revenue budget for financial year 2025/26. On 17 June 2025, the Policy and Resources Committee recommended approval of the detailed revenue budgets for 2025/26, which form the basis of the individual revenue expenditure monitoring reports.
1.3. Individual revenue expenditure monitoring reports are circulated every month to inform elected members of the up-to-date financial position. Quarterly revenue expenditure monitoring reports are presented to individual service committees.
1.4. In terms of revenue spending, at an individual cost centre level, budget holders are required to provide an explanation of the causes of each material variance and to identify appropriate corrective actions to remedy the situation.
1.5. Material variances are identified automatically as Priority Actions within individual budget cost centres according to the following criteria:
Variance of £10,000 and more than 110% or less than 90% of anticipated position (1B).
Not more than 110% or less than 90% of anticipated position but variance greater than £50,000 (1C).
1.6. Priority Actions can be identified at the Service Function level according to the same criteria and these are shown in the Revenue Expenditure Statements. As with individual cost centre variances, each of these Priority Actions requires an explanation and corrective action to be identified and these are shown in the Budget Action Plan.
1.7. The details have been provided following consultation with the relevant Directors and their staff.
1.8. The figures quoted within the Budget Action Plan by way of the underspend (-) and overspend position will always relate to the position within the current month.
2. Recommendations
It is recommended that members of the Sub-committee:
Note the revenue financial summary statement in respect of service areas for which the Asset Management Sub-committee is responsible, for the period 1 April 2025 to 31 March 2026, attached as Annex 1 to this report, indicating a budget overspend position of £380,900.
Note the revenue financial service area statement in respect of service areas for which the Asset Management Sub-committee is responsible, for the period 1 April 2025 to 31 March 2026, attached as Annex 2 to this report.
Note the explanations given and actions proposed in respect of significant budget variances, as outlined in the Budget Action Plan, attached as Annex 3 to this report.
For Further Information please contact:
Pat Robinson, Service Manager (Accounting), extension 2621, Email: pat.robinson@orkney.gov.uk
Implications of Report
1. Financial
The Financial Regulations state that Directors can incur expenditure within approved revenue and capital budgets. Such expenditure must be in accordance with the Council’s policies and objectives and subject to compliance with the Financial Regulations.
2. Legal
Regular financial monitoring and reporting help the Council meet its statutory obligation to secure best value.
3. Corporate Governance
In terms of the Scheme of Administration, monitoring the levels of revenue expenditure incurred against approved budgets, in respect of each of the service areas for which the Sub-committee is responsible, is referred to the Asset Management Sub-committee.
4. Human Resources
N/A.
5. Equalities
Equality Impact Assessment is not required for financial monitoring.
6. Island Communities Impact
Island Communities Impact Assessment is not required for financial monitoring.
7. Links to Council Plan
The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Council Plan strategic priorities:
☐Growing our economy.
☐Strengthening our Communities.
☐Developing our Infrastructure.
☐Transforming our Council.
8. Links to Local Outcomes Improvement Plan
The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Local Outcomes Improvement Plan priorities:
☐Cost of Living.
☐Sustainable Development.
☐Local Equality.
☐Improving Population Health.
9. Environmental and Climate Risk
N/A.
10. Risk
N/A.
11. Procurement
N/A.
12. Health and Safety
N/A.
13. Property and Assets
N/A.
14. Information Technology
N/A.
15. Cost of Living
N/A.
List of Background Papers
Policy and Resources Committee, 25 February 2025, Budget and Council Tax Level for 2025/26.
Policy and Resources Committee, 17 June 2025, Detailed Revenue Budgets.
Annexes
Annex 1: Financial Summary.
Annex 2: Financial Detail by Service Area.
Annex 3: Budget Action Plan.
Annex 1: Financial Summary March 2026
Date of Issue - 31 July 2026
The table below provides a summary of the position across all Service Areas.
| Service Area | Annual Spend (£000) | Budget (£000) | Over/(Under) Spend (£000) | % | Budget (£000) |
|---|---|---|---|---|---|
| Sundry Accounts | 6,928.5 | 6,547.6 | 380.9 | 105.8 | 6,547.6 |
| Repairs & Maintenance | 2,362.0 | 2,362.0 | 0.0 | 100.0 | 2,362.0 |
| 9,290.5 | 8,909.6 | 380.9 | 105.8 | 8,909.6 | |
| Service Totals | 9,290.5 | 8,909.6 | 380.9 | 105.8 | 8,909.6 |
Annex 2: Financial Detail by Service Area March 2026
Date of Issue - 31 July 2026
The following tables show the spending position by service function.
Sundry Accounts
| Service Function | PA | Annual Spend (£000) | Budget (£000) | Over/(Under) Spend (£000) | % | Budget (£000) |
|---|---|---|---|---|---|---|
| Utilities Holding A/C | 1C | 5,439.5 | 5,173.3 | 266.2 | 105.15 | 5,173.3 |
| Insurance Holding A/C | 1C | 1,367.1 | 1,253.7 | 113.4 | 109.04 | 1,253.7 |
| Telephone Holding A/C | 41.2 | 36.7 | 4.5 | 112.30 | 36.7 | |
| Photocopiers Holding A/C | 1B | 9.1 | 20.7 | (11.6) | 44.01 | 20.7 |
| Postages Holding A/C | 71.6 | 63.2 | 8.4 | 113.23 | 63.2 | |
| Service Total | 6,928.5 | 6,547.6 | 380.9 | 105.8 | 6,547.6 |
Repairs & Maintenance
| Service Function | PA | Annual Spend (£000) | Budget (£000) | Over/(Under) Spend (£000) | % | Budget (£000) |
|---|---|---|---|---|---|---|
| R & M General Fund | 1,866.5 | 1,866.5 | 0.0 | 100.0 | 1,866.5 | |
| Ground Maintenance | 495.5 | 495.5 | 0.0 | 100.0 | 495.5 | |
| Service Total | 2,362.0 | 2,362.0 | 0.0 | 100.0 | 2,362.0 |
Annex 3: Budget Action Plan March 2026
Date of Issue – 15 July 2026
Sundry Accounts
| Service Function | Service Description | Responsible Officer | Variance Reason | Action Notes |
|---|---|---|---|---|
| R45C | Utilities Holding Account More than anticipated expenditure by £266.2K | Kenny MacPherson | For information – the actual invoiced expenditure on energy and utilities was £5.778m, comprised of £4.049m (electricity), £1.2m (oil), £0.114m (LPG), £0.37m (water). This was offset by account income including RHI and Feed-in-Tariff leading to a net accounted expenditure of £5.439m. Electricity usage actually dropped to 13.8m units (previous year 14.2m units) and unit prices came down. However, despite being more efficient in the Council’s usage and while a service pressure bid increased the amount in budget this did not fully cover the increase in actual expenditure. Some of that was due to forecast reductions in oil prices not materialising and instead increasing, which meant the savings expected did not materialise. In addition, there was increased non-commodity prices such as standing charges and capacity charges. | Action has been taken on non-commodity factors which has reviewed capacities and is expected to reduce these costs. The supplier however does not permit a review of Banding in non-commodity prices unless a reduction of usage of over 50% is achieved per site which limits some of the opportunity to reduce structural costs. The structural costs continue to be monitored, and energy-efficiencies continue to be progressed as far as possible. |
IMAGE: The Budget Action Plan table records service function R45C, Utilities Holding Account, with a variance of more than anticipated expenditure by £266.2K; it gives the energy and utilities expenditure figures, explains the effect of usage, prices and non-commodity charges, and records actions to review capacities, monitor structural costs and progress energy efficiencies.
Sundry Accounts
| Service Function | Service Description | Responsible Officer | Variance Reason | Action Notes |
|---|---|---|---|---|
| R45E | Insurance Holding Account More than anticipated expenditure by £113.4K | Erik Knight | The insurance renewal costs for financial year 2025/26 came in higher than originally estimated. At the time of budget setting the renewal figures are still unknown and can be affected by claims history and the wider insurance markets. | Insurance costs and claims history continue to be monitored by the Finance team and reported to Corporate Leadership Team and it may be necessary in future financial years to consider increasing this budget and the property cost budgets across the Services. |
| R45G | Photocopiers Holding Account Less than anticipated expenditure by £11.6K | Kenny MacPherson | Work to reduce costs of printing and copying continues to achieve expenditure below budget. | No action required. – noting that work continues to ensure efficiencies. |
IMAGE: The Budget Action Plan table records service function R45E, Insurance Holding Account, with a variance of more than anticipated expenditure by £113.4K, and service function R45G, Photocopiers Holding Account, with a variance of less than anticipated expenditure by £11.6K; it gives the responsible officers, reasons for each variance and the corresponding monitoring or efficiency actions.